10 Things You Need To Know Before Opening A Marihuana Provisioning Center

You may be thinking about starting a marihuana provisioning center in Michigan. Now, after the passage of the Medical Marihuana Facilities Licensing Act or the MMFLA (M.C.L. 333.27401 et seq.) that is possible, however only if you get municipal approval and a State issued operations license. "Provisioning Center" is the legally acceptable term under Michigan's Bureau of Licensing and Regulatory Affairs, Bureau of Medical Marihuana Regulation, for what was previously referred to informally as a "dispensary." The existing regulations no longer allow such businesses to be referred to legally as "dispensaries" and the State requires that they be referred to as marihuana provisioning centers. A provisioning center is essentially a organisation where qualifying patients under the Michigan Medical Marihuana Act or the MMMA (M.C.L. 333.26421 et seq.) can come to acquire medical marihuana for medical use. While a provisioning center can be a successful endeavor, there are a few things you to understand before you move forward.

Can You Transport Cannabis In A Private Car?

Currently, under Michigan law, the basic guideline is that possession and transport of marihuana in a automobile is forbidden by law, and subjects you to criminal penalties. Only registered qualifying patients and registered caregivers under the MMMA can transport marihuana in a automobile. Even then, they must do so in strict compliance with the MMMA. Cannabis may only transferred in a locked, closed container in the trunk of a vehicle, where it can not be accessed by the driver or persons in the traveler compartment. You might likewise not have more than 2.5 ounces of usable marihuana, per registered qualifying patient. Caregivers can carry usable marihuana for up to 5 patients (and themselves as well if the caregiver is also a qualifying patient) or as much as 12 plants per patient (again, including plants for the caregiver, if they are also a qualifying patient). Under the MMFLA, however, provisioning centers that are licensed by the State and their local municipality, must only accept marihuana into their center that is brought by a MMFLA State Licensed Secured Transporter, or, if they have a grow or processing center co-located ( connected to or on the same property) and transportation of the marihuana will not occur on a public street, it can be moved as stated by LARA, BMMR under the Administrative rules.

How Much Cannabis Can You Offer?

A licensed provisioning center under the MMFLA may not sell more than 2.5 ounces of marihuana per day to a registered qualifying patient. A provisioning center that is licensed may likewise sell to a registered primary caregiver, but not more than 2.5 ounces per qualifying patient attached to the caregiver's license. If you are licensed by the State to run a provisioning center, you will need to use a point of sale system that has software that is complaint with the Statewide Monitoring Database, which utilizes a software program called METRC. The State allows making use of twenty-four (24) software programs that are METRC compliant. Every consumer who goes into a provisioning center, you will need to utilize a point of sale system that has software that is compliant. Every consumer who sets foot in a provisioning center must have their card run through the Statewide Monitoring Database to guarantee that they have not already been supplied their maximum daily quantity of 2.5 ounces from another licensed provisioning center. A provisioning center should likewise update the qualifying patient's profile on the Statewide Monitoring Database after sale, so that the Database will show how much medical marihuana was purchased by the patient at your provisioning center.

What License Do You Need?

You need a full license given by the state to operate as a Michigan provisioning center. If you are growing cannabis, you will also need to make sure that you get a Michigan commercial grow license application. You may wish to talk to an MMFLA legal representative, such as Fowler & Williams, PLC, about this to make sure that you are fully licensed, or you will be shut down. Most importantly, DO NOT begin operating your provisioning center without a State license being issued to you under the MMFLA. While the process of getting a license is complicated and requires a significant amount of time and money, the success of these provisioning centers far outweighs the expense of obtaining one. If you can get approved for a license and make it through the application process to acquire a provisioning center license, you should do so before you begin running.

Can You Get More Than One License?

Yes, you can apply and get approved for more than one license. This is useful for any business or individual who wants to set up a provisioning center and a grow or processor at the exact same time. According to the law, there is absolutely nothing stopping you from doing this. Further, you can acquire numerous provisioning center licenses so that you can run multiple provisioning centers in various cities. The licenses do not connect to the person or the business that is using, enabling you to use it anywhere you want. Rather, the licenses attach to the property you provide on your application for the business. For that reason, if you wish to open several provisioning centers, you will need to submit several State applications. If you prefer to get various kinds of licenses (say a grow or processor license) in addition to a provisioning center, you can co-locate them at one facility, but you need to submit different applications for each license type, and need to meet the minimum financial and background requirements independently for each license type.

How Much Will A License Cost?

The cost for the license application to the State is $6,000.00 per application, regardless of license type applied for, including for a provisioning center. There are also municipal application fees, which can be up to $5,000.00 per application. Each municipality is different, and they can charge different fees, and they can vary the costs depending on which type of license you apply for. Normally, however, they charge the maximum permitted, which is $5,000.00 per license application. Further, after you get a State license, there are regulatory assessments that will need to be paid yearly, both after issuance and each year after when the license is renewed.

In 2018, the assessments differ.

Secured Transporters and Safety Compliance Facilities (testing labs) have no assessment ($ 0.00).

Class A Growers have a $10,000.00 regulatory assessment.

Class B and Class C Growers, Provisioning Centers and Processors have a $48,000.00 regulatory assessment.

The State has stated that beginning in 2019 there will be a standardized regulatory assessment that will apply to all license holders, no matter the kind of license provided. For now, however, the assessments will remain as noted above. You will also discover that there are other professional costs that you will have to pay in order to guarantee that your application is complete, and that your business plan, with all of its needed parts, is up to par with the State's application requests. Those costs can vary considerably, and are difficult to predict.

Needless to say, the application and licensing process is an expensive venture, but in a market that is slated to do about $891,000,000.00 in annual sales this year, up from about $741,000,000.00 in 2017, the return on investment could be substantial.

Should You Have A Attorney?

While not required, you should certainly ensure that you are obtaining advice from an MMFLA lawyer before you consider opening a Michigan provisioning center. It  is very important that you get the very best possible legal guidance and that you are following all the regulations and requirements. Only an attorney experienced in managing cases under the MMMA and licensing work under the MMFLA, like Fowler & Williams, PLC, can ensure that you have all the tools and guidance that you need to give your application the very best possibility at success. Failure to make certain that your application is complete, and that it supplies support for your capability to presently comply and guarantee future compliance with the Administrative rules, your application is far more likely to be rejected or rejected, and your dream of opening a provisioning center brought to an unceremonious ending.

How Much Will This Business Cost?

You can expect the overall start-up costs for this type of service to be anywhere in between 400 and 500K, at a minimum. While the State needs a minimum capitalization requirement of $300,000.00 (one quarter of which must be liquid funds), that will not be sufficient, realistically, to start business. You will need to potentially acquire land or property in an opted-in municipality. (Here is an up to date list of Michigan Municipalities currently opted-in to MMFLA) There will be mandatory fees, expenses, and professional services that you need to acquire to guarantee that your application is accurate and total, and to make sure that you are currently in compliance with all laws and regulations, along with guaranteeing future compliance. This includes everything from licensing to a complete team of employees and much more. It's certainly not inexpensive, and you need to be prepared for a heavy financial investment. Nevertheless, as noted above, the marketplace is big, and continuing to grow.

Can You Go Mobile?

No, you can not run a mobile provisioning center as it is presently unlawful to run one in the state of Michigan. However, this might change, and that's why it  is essential to talk to a medical marihuana attorney routinely, so that you are keeping up to date with modifications to the law. Cannabis law is an evolving and changing field, and as a result, there may come a time where the MMFLA or the MMMA is amended to enable a mobile provisioning center.

What Are You Lawfully Able To Do?

As a provisioning center, your sole function is to offer safe medical marihuana to registered qualifying patients. You might only sell marihuana or marihuana infused products that were grown by a MMFLA licensed grower or processed by a MMFLA licensed processor and the items have actually been tested by a MMFLA licensed safety compliance facility with proper labeling and tracking. You may not sell these products prior to your obtaining a license, unless you were running with city approval prior to February 15, 2018 and you have already submitted an application to the State seeking a license.

Soon a modification in law will likely allow for recreational marijuana sales. If the ballot initiative passes, for the first two years after the State passes recreational cannabis facility regulations and begins accepting licensing applications, only centers licensed by the MMFLA to offer, grow, process, transport or test medical marihuana will be lawfully allowed to look for recreational marihuana licenses for the same activity. Thus, obtaining a provisioning center license under the MMFLA, offers you the chance to enter the recreational market, where others will not.

What Are The Requirements?

In order to make an application for a provisioning center license, you need to ensure that you do not have a disqualifying criminal conviction, and that you fulfill the minimum capitalization requirements, which as noted earlier are $300,000.00 with 25% liquid capital. You will also need to obtain an appropriately zoned building in a city or area that has "opted-in" to the MMFLA to permit such centers to run within their limits. Whether your own it or rent it does not matter, however you need to have the structure. After that, you will have to produce a business plan that contains all of the required aspects from the state, including a security plan, facility plan, marketing plan, staffing plan, technology plan, recordkeeping plan, waste disposal plan, and more, showing that you will adhere to the State's guidelines now and in the future.

Conclusion

We hope this provides you with some of the info you need before opening a Michigan provisioning center. Needless to say, the process is costly, intricate and time consuming, but the reward and ROI can be significant. In reality, obtaining a qualified MMFLA and MMMA attorney, like Fowler & Williams, PLC, can help streamline and simplify the application procedure, and take the majority of the work off your plate.

If you want info, or want to come in and discuss obtaining a provisioning center license, we would enjoy to have you come in for a consultation.